ASIC policy for research

The corporate regulator has updated its policy guide on research providers, including managing conflicts of interest and providing transparency on research processes.

The Australian Securities and Investments Commission released Regulatory Guide 79 yesterday, which will apply to research analysts, securities analysts and research houses across a broad variety of investment products.

Among the issues covered in the guide are the quality of the research process and ability of users to form a view on the findings’ reliability.

ASIC commissioner
Peter Kell
said there had been “serious concerns" about the quality of research recently, particularly in light of various investment failures that had been “rated highly".

“Research report providers are important gatekeepers in the financial services industry, standing between product issuers and the investors who purchase investment products either directly, through advisers or through their super fund," he said.

ASIC said it would conduct “targeted surveillance" of research report providers to assess the industry’s compliance.

“If standards do not improve, ASIC will revisit the regulation of research report providers and consider whether specific law reform is needed," Mr Kell said.

Research house Lonsec said ASIC’s updated regulatory guide would help “raise the bar" on professionalism in the industry and manage conflicts of interest.